Each of the following transactions would be classified as either an investing or a financing activity except when
A)investments in stock are purchased.
B)a bank loan is obtained.
C)stock is issued to acquire land.
D)dividends are paid.

Question

Each of the following transactions would be classified as either an investing or a financing activity except​ when
A)investments in stock are purchased.
B)a bank loan is obtained.
C)stock is issued to acquire land.
D)dividends are paid.

Quizplus · Accepted Answer

Issuing stock to acquire land can be classified as either a financing or investing activity depending on the circumstances. If the land is being acquired for operational purposes, it would be classified as an investing activity. However, if the stock is being issued purely to raise capital for financing purposes, it would be classified as a financing activity.

Each of the Following Transactions Would Be Classified as Either